Research On Internal Control Of Inventory Management In Pharmaceutical Enterprises

As the country with the largest population in the world, with the accelerating of aging process, the improving of Chinese living standards and the reforming of medical insurance system,China’s demand for pharmaceutical products will be growing. The pharmaceutical market developing potentiality is huge. China already became the world’s No.3pharmaceutical market. With the rapid development of the pharmaceutical companies, a series of problems in business management are exposed, especially on internal control. The weak internal control of inventory management is one aspect of them.Inventory is an important liquid asset. The inventories manage and using are often critical to the using level of companies’funds and the efficiency of assets operation. Particularly for pharmaceutical companies, because the conditions of medicine storage and transportation are strictly defined in Chinese GMP, so the management of inventory is even more difficult. According to statistics, the direct cost of drug production is only about10%of the total cost, but the cost of inventory is more than30%. In the process of medical logistics, the cost is very high, too. But, currently, the general situation of the implementation of inventory management internal control for pharmaceutical industries is not ideal. Therefore, it is particularly important to build a good internal control system of inventory management, so that the pharmaceutical companies can reduce the costs of management and improve the efficiency of operation.By using the method of standard research combining with case analysis, based on the related theoretical research, from the aspect of the five elements of COSO internal control, this paper has discussed the internal control problems about X Pharmaceutical Company, such as the weak inventory management internal control environment, the unreasonable purchasing department structure, the low procurement efficiency, the confusion of warehouse on-site management, the non-standard stocktaking, the bad third-party logistics management control, etc. And, the corresponding improving suggestions are given as well, such as establishing a specialized internal control organizations and an independent inventory budget system, improving the purchasing department structure, improving the procurement efficiency, controlling the warehouse management and stocktaking processes, strengthen the information exchange and communication between departments, etc.